Question

A invested a sum of Rs.20,000 at 8% per annum compound interest. He received an amount of Rs 23328 after t years. Find t
1. 1 year 
2. 2 years
3. 5 years
4. 4 years

Answer 1

Correct Answer - Option 2 : 2 years

Given

Principal = Rs.20,000

Amount = Rs.23328

Rate of interest = 8% per annum

Formula used

A = P(1 + r%)^t

Where A, P, r, and t are amount, principal, rate and time respectively

Calculation

23328 = 20,000 (1 + 8%)^t

⇒ 23328/20,000 = (108/100)^t

⇒ 729/625 = (27/25)^t

⇒ (27/25)² = (27/25)^t

⇒ t = 2 years

∴ Value of t is 2